Lagos Changes Rules For Island Developers, Targets More Benefits For Lagosians

The Lagos State Government has introduced a new revenue-sharing framework for waterfront and island developments, marking a major departure from the former practice of one-off payments for reclaimed land, as part of efforts to ensure the state benefits more sustainably from long-term real estate value creation.

The policy was disclosed by the commissioner for waterfront infrastructure development, Dayo D’Bush Alebiosu, while reviewing the ministry’s activities in 2025 and outlining projections for 2026.

He disclosed the shift followed the government’s realisation that the previous model left Lagos short-changed despite massive value appreciation on reclaimed land over time.

“In the past, a company could reclaim 100 hectares, pay the government maybe ₦5 billion, and everyone would think the government had made money. But years later, you discover that just two plots from that land could sell for ₦9 billion,” Alebiosu explained.

He cited a specific case where land initially valued at about ₦1 billion per 1,000 square metres appreciated to about ₦4.5 billion within two years, a development he said clearly exposed the shortcomings of the old arrangement and triggered a rethink of the state’s approach.

According to the commissioner, the new policy replaces heavy upfront payments with a system in which the government collects administrative fees and enters into a profit-sharing ratio with developers, allowing Lagos to earn continuously as projects mature.

“Rather than overburden developers with heavy upfront costs, we now collect administrative fees and go into a sharing ratio. The more they earn, the more Lagos earns, and the more infrastructure we can deliver across the state,” the senior cabinet member said.

Alebiosu said activities in 2025 were largely shaped by the Lagos State Waterfront Infrastructure Development Summit, which brought together public and private sector stakeholders to confront long-standing challenges in the sector, particularly illegal dredging.

He said one of the key innovations introduced during the year was the deployment of floating pontoons for jetties, which were installed for the first time at Agboyi-Ketu and six other locations across the state.

“We introduced floating pontoons because of their long-life guarantee. We want to see how they interact with our waters before expanding them further,” Alebiosu said, adding that future expansion and jetty rehabilitation plans are being aligned with budget approvals at the Lagos State House of Assembly.

The commissioner said the revised revenue-sharing model also supports the administration’s housing agenda, with several island schemes structured for completion within the current tenure.

D’Bush identified Orange Island and Graceville as key projects with strong delivery potential, driven by collaboration between the government and private developers.

He also highlighted the Odogun Waterfront and the recently approved Oworonshoki Waterfront in Kosofe local government area as projects with significant economic implications.

According to Alebiosu, the Odogun Waterfront is designed to deliver about 4,000 housing units, with all preparatory processes completed and the state awaiting final contract execution.

“Once construction starts, the entire area will become vibrant. Construction sites generate massive economic activity — artisans, suppliers, transporters, food vendors — and this is 4,000 housing units in one location,” he said.

He added that the project would stimulate local employment, increase land values, expand the tax base and drive ancillary businesses across Kosofe and neighbouring communities.

On the Oworonshoki Waterfront, Alebiosu said the land, which was reclaimed during a previous administration, faced serious threats from illegal sand theft before the current government intervened.

“We had to move in fast to prevent reclaimed land from turning back into water,” he said.
Looking ahead to 2026, the commissioner expressed optimism that the combination of infrastructure upgrades, housing delivery and the new island revenue-sharing framework would deepen Lagos State’s internally generated revenue and translate into more roads, housing, jetties and improved quality of life for residents.

“The more value these islands generate, the more Lagos benefits. That translates directly into roads, housing, jetties, and improved quality of life for our people,” Alebiosu said, adding that the state is positioning its waterfront assets not just as real estate ventures, but as long-term engines of inclusive growth for Lagosians.